Datang Telecom Technology & Industry Group, a major home-grown 3G technology developer, signed an agreement with the Shanghai government yesterday to co-develop the next-generation mobile technology and make the city a major hub for 3G.

Under the agreement, Datang Group plans to invest heavily in 3G, or third generation, and 4G technology research, 3G equipment manufacturing in Shanghai and complete a strategic investment of US$171.8 million into Shanghai-based Semiconductor Manufacture International Corp, the biggest made-to-order chip maker on the Chinese mainland, both parties said yesterday.

"It (3G technology) is an opportunity we can't neglect in the tough environment and it will improve the whole telecommunications industry structure in China," said Zhen Caiji, chairman and president of Datang Group. The pact was the first to be inked after Shanghai launched favorable policies to attract investments from companies directly owned by the central government, including Datang Group, Zhen added.

China issued 3G licenses to China Mobile, China Telecom and China Unicom in January. The 3G services allow users to enjoy high-speed services like video conference and film download onto their cell phones.

China Mobile has launched 3G services based on TD-SCDMA (time division-synchronous code division multiple access) technology, mainly developed by the Datang Group.

Datang Group cooperated with 3G partner Alcatel-Lucent Shanghai Bell to build 20,000 TD-SCDMA base stations and it accounted for 40 percent of the China Mobile's second phase 3G network construction.

It has also invested several hundreds of million yuan to set up Leadcore Technology, a 3G and 4G chip design firm, in Shanghai. It said in December it would acquire 16.6 percent of SMIC to become the chip firm's biggest shareholder.

(Shanghai Daily February 5, 2009)